Governing Board Begins Reviewing Impacts of 2008 Sunset of First ‘IAL’
CEA Chief Financial Officer Tim Richison, joined by CEA consulting actuary Shawna Ackerman, provided carefully-constructed financial scenarios for the Board’s review, created using the CEA’s dynamic financial analysis (“DFA”) model. To provide appropriate perspective, structural analyses were provided both with and without the continued existence of First Industry Assessment Layer and scenarios were run to the year 2025.
The Board directed staff to provide additional analysis of these and related matters, and asked staff to analyze and bring to the Board those financial-structure alternatives that hold promise to keep the CEA strong and viable after one or multiple earthquakes. The Board emphasized its interest in creative and innovative solutions, extending even to alternatives that are not contemplated by the CEA statutes in their current form.
On another topic, the CEA Governing Board voted unanimously to disengage from Assembly Bill 527 (Levine), which would expand the Board’s voting membership to five by allowing the two present non-voting members to appoint voting members to four-year terms. The Board noted the serious challenges arising from the legislation’s potential conflict with the Board’s long-held precept that the CEA’s tax-exempt status is of paramount importance. Instead of pursuing the bill this year, the Board asked staff to engage in and seek out appropriate analysis and report to the Board on possible resolutions by year-end.
Just over 800,000 current and former CEA policyholders recently received a reminder about the features and flexibility of earthquake insurance in their mailboxes and on their radios. Over-sized postcards began arriving at residences throughout California just after the Memorial Day weekend, accompanied by a flight of radio advertisements in the San Francisco, Los Angeles, and Lake Tahoe media markets. The Lake Tahoe holiday tourist traffic was targeted because of the recent report by the California Geological Survey about lake-bottom faults, especially in the Sierra Nevada, and because the population in Tahoe more than doubles as Bay Area residents head to the lake for the long weekend. Many visitors from the Bay Area own vacation homes in the area, making the holiday weekend an excellent time to deliver a targeted earthquake safety and insurance message, as residents rely on radio traffic reports as they make the drive up the hill.
This awareness campaign is a follow up to the successful “Do You Know” campaign that
was launched in October 2003 and that triggered more than 200 calls daily
into the CEA.
The mailing reminds consumers that Every day is earthquake season in California! ®
The CEA launched a mitigation pilot project that encourages consumers to protect themselves and the contents of their home from earthquake damage, and to receive a rebate in the process. CEA is coordinating with Trevco/Quakehold to implement the first of a series of public-private mitigation pilot projects approved by the CEA. Under the program, hardware and home improvement stores are offering consumers who purchase and install personal property mitigation products in their home an opportunity to obtain $10-$30 rebates. Featured products include furniture and television straps, water heater straps, and earthquake putty. Also, the CEA is working with more than 300 retailers to strategically place the information handbook “Putting Down Roots in Earthquake Country” in special in-store displays.
The CEA participated with a team of experts from the United States Geological Survey (USGS), the Federal Emergency Management Agency (FEMA), the American Red Cross, the Association of Bay Area Governments (ABAG) and the Southern California Earthquake Center (SCEC) that worked together to produce the handbook. The 32-page handbook, designed for Southern California, has been well-received and soon, two more versions will be published. The group is collaborating on the development of a Greater Bay Area version that is sensitive to the social, cultural, seismic, and geological differences between Northern and Southern California. In addition, a new section titled, “What Should I Expect?” has been added to educate individuals about likely circumstances after a significant earthquake. The third version of “Roots” will be designed for Northern California’s Cascade region focusing on earthquakes in Humboldt County where, according to scientists, the subduction zone creates the potential not only for earthquake damage but also for devastating tsunamis.
New Designees Added to CEA Governing Board
The CEA Governing Board welcomes two new CEA Governing Board designees. Anne Sheehan, Chief Deputy Director of Policy at the Department of Finance, was recently appointed by Governor Schwarzenegger and State Treasurer Phil Angelides recently appointed Dennis A. Trujillo.
Dennis A. Trujillo is Deputy State Treasurer and previously served as Executive Director of the California Educational Facilities Authority. Prior to joining the Treasurer’s Office, Mr. Trujillo was Deputy Director of External Affairs for the California Department of Transportation (Caltrans).
Prior to joining the Governor’s Administration, Ms. Sheehan was the Executive Director of the California Building Industry Foundation. Ms. Sheehan has also served in leadership in many state positions, including Secretary of the California State and Consumer Services Agency in 1998.
CEA Welcomes a New Participating Insurer
The California Earthquake Authority welcomes Foremost Insurance Company as a new CEA participating insurance company. Starting July 1, 2005, the CEA will be the provider of earthquake insurance to Foremost’s California residential policyholders.
Agents who sell Foremost insurance products were sent a welcoming letter from the CEA highlighting the wide variety of earthquake coverages for California homeowners, renters, and owners of condominiums and mobilehomes. The letter also mentioned the CEA’s financial strength rating of A- (Excellent) issued in 2002 by A.M. Best Co., the oldest and most authoritative insurance company rating agency in America.
CEA informational materials are available to all agents who sell CEA earthquake insurance products. To learn more about the CEA, send an email request to: CEAbrochures@calquake.com.
Visit www.EarthquakeAuthority.com to review or print materials that will help answer your questions about the CEA and its products.
Sponsors DRC Conference
For the fifth consecutive year, the CEA was a major sponsor of the Disaster Resistant California conference (DRC) May 16-18, in Sacramento. Each year, the event is co-hosted by the Governor’s Office of Emergency Services (OES) and San Jose State University’s Collaborative for Disaster Mitigation (CDM) and brings together private and public participants to share ideas, technologies, and resources for disaster mitigation and preparedness.
The goal of the annual spring conference is to increase coordination between the federal, state and local governments and the private sector in the implementation of hazard mitigation measures in California.
The comprehensive program was complemented by an abundance of vendor exhibits and demonstrations. In addition to having an important presence as a major conference sponsor, the CEA used the venue to host a roundtable discussion on “Designing an Ideal Mitigation Program.”
The unique conference highlighted various aspects of disaster mitigation, planning, preparedness, response, and recovery, through plenary panels, workshops, and professional development courses.
The 2006 Disaster Resistant California conference is scheduled to be held in San Francisco. CEA is on the conference planning team for the conference, which will commemorate the 100th anniversary of the 1906 Great San Francisco Earthquake.
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